Market News

NAIROBI, March 18 – African nations are expected to borrow $155 billion in long-term commercial debt this year, S&P Global Ratings said in a report, a 10% increase on the previous year, to refinance maturing debt and navigate growing fiscal obligations at home.

Here are details from the report issued late on Tuesday:

• Projected borrowing for 2026 will raise total outstanding sovereign commercial debt to just above $1.2 trillion, the report said, equivalent to about half of the countries’ economic output by year-end.
• Egypt is projected to be the biggest issuers, along with South Africa and Morocco, the report said.
• Fallout from the Iran war could curb African nations’ borrowing plans this year and have an impact on the cost of fresh issuance, but the effect could be limited by benign liquidity conditions in global financial markets, compared with previous years.
• “We expect the war and its implications for hydrocarbon shipping lanes, particularly the Strait of Hormuz, will begin moderating over the next few weeks, but if the war continues beyond that, it could impair fiscal positions, inflation profiles, and financing plans across Africa,” S&P said.
• With most countries in the region depending on imports of refined fuel products, a surge in retail prices could pressure government finances and budget deficits in countries like Angola that provide fuel subsidies.
• Cost of debt across the region can vary between individual economies but the annual median of the 27 rated African issuers stands at $1.5 billion, lower than in other regions S&P said. This reflects a reliance by governments on cheaper credit from multi-lateral lenders like the World Bank in overall borrowing.
• “Favourable external financing costs, which are at multi-year lows, provide some reprieve, as governments can refinance upcoming fo